Thursday, March 06, 2008

Incremental and Disruptive Innovation

We often throw these words around quite frequently, assuming that other people know what we mean when we say "incremental" or "disruptive" innovation. What do we mean when we say these things, and where do these ideas come from?

If you were to think of innovation as a spectrum, on the most conservative end of the spectrum is incremental innovation. Really, on the MOST conservative end of that spectrum are concepts like product roadmaps and next product releases. Incremental innovation is simply the next version of a product or service - the most likely next release or product. As you proceed along the spectrum you'll come to concepts like breakthroughs - these can represent a distinct change in a technology or service or business model from the existing solution. Finally, as you edge ever closer to the most radical end of the spectrum, you'll come to the disruptive ideas - ideas that significantly change an industry or a marketplace, and force competitors to adjust their view of the world.

Incremental ideas are fairly easy to acquire. Folks in your business are walking around with them right now, all the time. They are natural extensions of existing products and services. Breakthroughs are the ideas that Michael Keaton made famous in the movie Nightshift. Do you remember his tape recorder where he would record great ideas like "feed the tuna fish mayonnaise"? Breakthroughs often combine two concepts that were not thought of as practical or relevant to combine. You hear these ideas every day as well, and quickly reject them because they often don't appear realistic on the surface.

Disruptive ideas are those that would cannabalize your existing products or markets, or radically change your market or industry. These are the ideas that people in your teams toss out ocassionally and everyone chuckles nervously, because anyone within the industry would be crazy to do them, due to the destruction of the infrastructure or investment. However, anyone outside the industry would be very likely to do them to enter and disrupt the market and force the existing providers to adjust. This is also why truly disruptive ideas almost always come from outside an industry. It's simply too hard to disrupt your own industry, due to the investments and existing product portfolio. But, with the right combination of products and services and business models, you might disrupt another market or industry.

Use the automobile industry as an example. No matter how innovative the market gets around transportation, the industry is going to provide a solution that has an engine and four wheels. They can't think any other way. So an idea like a more efficient gas engine or hybrid is a natural for these guys, and a big stretch is to a fuel cell engine. Someone like Dean Kamen, or a light airplane designer or some other team outside of the automotive industry, will be the ones who ultimately disrupt this market.

8 Comments:

Not to nitpick, but you are conflating incremental and sustaining on the one hand, and disruptive and radical on the other. Clayton Christensen's model really as 2 axes, not one. I explain the confusion in my piece Disruptive vs. Radical Innovation. Disruptive/sustaining refers to the magnitude of the impact, while incremental/radical refers to the magnitude of the innovation itself.

Disruptive innovation can be described more simply as creating something that fundamentally shifts the way things are done. Using analogies from Systems Thinking, the whole world is a complex web of interactions that localise around tightly linked processes that are all loosely linked to other tightly linked to other localised processes. Disrupting the norm in one small area then, can have a follow on effect to the way the whole world works.

If it helps, I've discussed this briefly with some suggested reading etc on my blog (www.urbansurvivalproject.org) at http://urbansurvivalproject.blogspot.com/2008/04/disruptive-innovation-some-pointers.html

Your comment about the team chuckling nervously made me think of my "Silly Suggestions" technique for teams that are struggling with creative ideas. It's amazing how taking away the artificial limits we place on our thinking can lead to useful results.

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